New Xbox bundle with Sega games

Microsoft has confirmed that, starting this week, the Xbox will come with two Sega games and the smaller Controller-S.

This week, US retail stores will start selling a new Xbox bundle. Microsoft has confirmed that the bundle will include the Xbox console, the smaller 2852514Controller-S originally designed for the Japanese Xbox launch, and the full versions of two Sega games: Sega GT 2002 and Sega GT 2002 . The new bundle will be sold for $199 starting Tuesday, October 15.

The new bundle will become the primary Xbox hardware product, or SKU, as retailers sell out of the previous boxes of Xbox consoles. Microsoft plans to phase out its earlier bundle that included a rebate when the DVD remote was purchased with an Xbox. The new bundle is currently confirmed only for the US. David Hufford, Xbox marketing manager at Microsoft, said to stand by for details on bundles for other territories.

Describing the intent of the new bundle, Hufford said that it was designed to "further fuel the installed base for Xbox. This bundle is a great way for us to reach out to Mom and Dad looking for a great value this holiday season." Hufford went on to comment on Microsoft's relationship with Sega, saying that Sega has been an "awesome partner and we've learned a lot from them."

This holiday season is a critical moment for Microsoft as the company tries to increase market share for the Xbox. Hufford pointed out that Microsoft has a "triple threat" that includes the new bundle, Xbox Live, and anticipated games like Sega GT 2002 . Xbox Live, Microsoft's online service, launches on November 15, and Hufford estimates that tens of thousands of Xbox owners will buy the $49.99 Xbox Live starter kit and sign up for the service this holiday season. He noted that the number might well be in the hundreds of thousands, given the response to the Xbox Live beta.

There was some 2885012concern that the recent labor lockout at US West Coast ports might affect Xbox shipments from manufacturing facilities in Asia. Microsoft believes there's enough product in the distribution channel to ensure a steady supply of Xbox consoles for the holidays. Hufford said, "We are glad things ended when they did."